一个品牌要开拓新市场，市场调查必不可少，external business environment将很大程度影响品牌的进入。英国餐饮品牌Nando’s意欲进入中国，它将面临的是一个怎样的市场环境。下文是EssayPhD团队针对这个案例创作的marketing论文代写范例。EssayPhD保证范文的原创性，请勿使用作其他用途。
The purpose of this report is to analyze the feasibility of Nando’s in entering Chinese food market. More specifically, the first part of this report applies the PESTEL model in examining the external environment of Chinese catering industry and the second chapter investigates the challenges and opportunities Nando’s could possible face in the development of its brand in China. Furthermore, some key drivers of globalization that could have impact on Nando’s business in China are indentified in the end.
The PESTEL analysis was considered as one of the most common frameworks for analyzing the external business environment (Gupta, 2013). The underlying contribution of this model is that it forces companies to devote more consideration into the external environment of an industry and react to any changes that could affect the business. Besides, this model also reflects the idea that business strategy requires a fit between companies’ capabilities and the external environment in which they operate and thus it is necessary for company to pay more attention into the changes reaction towards the external environment (Gupta, 2013). CIPD (2015) also suggested that PESTEL model can be used as a strategic tool to explore the external influential factors on the market trend, business position and the potential direction for operations as well as guiding the strategic decision-making. It can also assist company in maximizing the opportunities and minimizing the threats beforehand (Gupta, 2013). Therefore, it is crucial for companies to analyze the external environment of an industry through PESTEL model in order to assess its feasibility in entering to a new industry.
Oxford Learning Lab (2012) described that the political factor referred to a country government’s attitudes and the stability of its political environment. Lu (2013) also pointed out that the stability of a government and economic policies of the country played a significant role in the development of catering business in China as it can be easily affected by the government attitude. Nando’s can be affected by a various range of political factors in China such as corporate tax, business rate and trade restrictions etc. In addition, the patterns of sourcing raw materials have become a significant political factor that could affect on the catering business. More specifically, Chinese government had announced that it was compulsory for any foreign business, which engaged in sourcing raw materials, to comply to the environmental and social norms, and any intentionally or unintentionally disregard of this norms were likely to suffer a political pressure from the government (Dudovskiy, 2015).
The market research report (2011) had illustrated that China was valued by its extraordinary customer size and growth, and was also characterized as one of the most vibrant countries in terms of the economic development. China’s GDP had grew from 362.4 billion RMB to 30 trillion RMB in around 30 years since the reform and opening up in 1978 (2011). As the third largest economy country, it is evident that the catering industry in China are moving forward to an optimistic future prospect and increasing foreign catering enterprises seek the opportunities to enter into this profitable local market with powerful impact on the customers (Docin, n.d). Consumer buying power usually represents as a country’s overall economic symbol and is also one of the most significant economic factors that could influence Nando’s profitability. GaoLin (2014) pointed out that China’s Engel Coefficient, which was the proportion of food expenditure out of the overall expenditure and was a mainly indicator of people’s living standard, has changed from more than 60% to less than 30% in 2013. And it means that the quality life of Chinese people had improved from being merely sufficiently fed to comfortable as a result of the economic development (BTS, 2007). In addition, the plentiful labor resource and relatively low of labor price had made a great contribution to the development of labor-intensive industry such as catering industry (Market research report, 2011). Therefore, these beneficial economical factors create a favorable condition for a large number of foreign enterprise, including Nando’s, in entering into Chinese catering market.
The social-cultural environment can affect the customers’ taste and demand for different products and how a company operates (Mangan, 1997). In China, with the improved level of income, Chinese people trend to have a higher requirement of life quality and prefer to enjoy their leisure time by having meal outside of home (Docin, n.d). And it is noticeable that Chinese people consider dining out in a fancy restaurant with family or friends as a way of social activity or an amusement activity (Ishaque, 2014). Therefore, increasing number of restaurants in China are open in order to meet the significant amount of customers’ requirements, which would be a beneficial external influence for Nando’s in expanding its business into China.
Besides, Dudovskiy (2015) also illustrated that the spread of international culture and lifestyle had a crucial influence on Chinese’s consumption habit and it became an important social factor which contributed to the increasing demand for international restaurant in China. Those who are attracted to international culture and values trend associate international restaurants as a symbol of international lifestyle (Lu, 2013). Therefore, as a Portuguese restaurant, Nando’s has the advantage in entering Chinese market based on this favorable consumer perception. However, there are certain social factors that might challenge the development of Nando’s long-term growth in China. According to Dudovskiy’s (2015) investigation, a growing number of people have started to devote more attention to the safety concern in relation to the ingredient of food, especially after the exposed event of KFC. In addition, the increasing healthy concern by Chinese people has also changed the supply and demand chain of nutritious food and they are not satisfied with only tasty food but also search for healthier food (Ishaque, 2013). Thus, in order to enter Chinese market, Nando’s may have to improve and innovate with its narrow range of food menu and enhance with nutritious food menu.
Oxford Learning Lab (2012) expressed that the technological factors in catering industry refer to the changes in internet and e-commerce, the method of information exchange, and related nutrition research development etc. Lu (2013) also described that there was a tendency in catering industry to focus technological developments on digital and internet-related areas. The rise of e-commence had contributed to the development of catering industry and the way of how it promote its brand. According to Han (2013), increasing number of catering companies started to use social media besides traditional media to promote its brand and most of the customers in China tend to embrace this new technological advertising method. In addition, the catering industry become much stricter on the technical requirements of environment protection (Lu, 2013). Furthermore, other technological factors such as the raw material supply system, quality monitoring and food standardized production still require for a further research and development.
The analysis of environmental factors can include the issues such as waste disposal. limited natural resources and recycling procedures etc (Market research report, 2011). In China, the government had published several regulations in regularizing food enterprises. For example, in 2010, China issued an environment protection regulation and emphasized the protection of environment, the saving of resource, and human safety (Lu, 2013).
Oxford Learning Lab (2012) highlighted that political factors and legal factors such as national employment laws and international trade regulations are inevitably entwined together. The difference between political and legal factors is that political factor concerns the government’s attitudes or approaches, whereas legal factor refers to those which have became law and regulations. Besides, legal factors are mandatory, whereas political factors might stand for influence or restrictions. In China’s catering industry, the government had published several laws and regulations such as Food Safety Laws of PRC, Food Safety Regulations of PRC and Administrative Measures for the Licensing of Catering Services in order to regularize the food business (Lu, 2013). The food quality assurance had shifted from food safety to food security. In addition, Chinese government had devoted increasing emphasis on the regulation of environment protection and implemented the Technical Specification for Environmental Protection of Catering Industry regulation since 2010 (Han, 2013).
Challenges and opportunities
One of the most practical contributions of PESTEL model is that it could not only provide analyst with a macro-environment analysis of an industry, but also reflect the challenges and opportunities a company could possible face, and thus prepare beforehand for reacting to the changes (Gupta, 2013). Based on the analysis of the external environment of catering industry in China, it is obvious that one of the challenges Nando’s face is the fierce competition in the Chinese food market with a large number of distinguish styles of food. As one of world largest kingdoms of cuisine, China has around eight great traditional Chinese cuisines with completely different styles food and more than ten emerging new style of food (Wu, 2013). This various of food styles gives Chinese people a broad choice over the types of food they prefer and a fierce competition for the food companies (BaiduWenku, 2012). Therefore, Nando’s has to have its own distinguished characteristic over the food and service in order to develop in the long run. In addition, another challenges for Nando’s is that only focus on chicken dishes might have an unfavorable impact on the attractiveness of Nando’s for Chinese’s constant changing taste and might also lose some of vegetarians customers (Brandguide, n.d). on the other hand, this also gives Nando’s an opportunity in introducing and innovating variety new Chinese characterized food besides chicken exclusively for Chinese market in order to enhance its competitiveness. Furthermore, China has an unequal consumption level over the first-tier cities such as Beijing, Shanghai and Guangzhou and second or third tier cities (Market research report, 2011). Therefore, expansion opportunities in the first-tier cities, where customers have relatively high level of consumption and a preference on the international foods, would have significant impact on Nando’s in establishing the long term strategy in China (BaiduWenku, 2012).
As one of the most vibrant development countries, the rapid economic development had not only increased China’s GDP from 362.4 billion RMB to 30 trillion RMB in 30 years, but also attracted a large number of international enterprises in investing business in China (Market research report, 2011). Besides, with the increasing level of quality life, huge customer demand had also created an enormous and potential market for international business including catering business (Dudovskiy, 2015). Particularly, Chinese people have a preference over the international culture and values since the reform and opening up of China and thus customer perception had shifted from local market into global business (Lu, 2013). Additionally, the support of Chinese government towards the political decision of foreign enterprise such as trade policy and corporate tax had also accelerated the globalization. Furthermore, the relatively economic labor price in China had contributed to the increasing international enterprise in entering Chinese market in order to access to the labor resource (Market research report, 2011). In addition, the emerging ways of communication globally through new media or e-commence had connected the world closer than any other time before and thus created a favorable condition for international business to develop (Docin, 2015). All of these key drivers of globalization in China had generated a positive influence on Nando’s in entering the Chinese catering market.
With the above discussion, it can be concluded that China is a huge potential global market for Nando’s in developing its international business. However, there are still several challenges and threats such as the fierce competition and customers’ constant changing requirements that Nando’s has to intelligently deal with. Even so, the challenges could also become opportunities, on the other hand, for Nando’s in improving its competitiveness such as innovating with its narrow range of menu etc. In conclusion, China could become Nando’s one of most profitable international businesses, but the long term development of the business depends on Nando’s distinctive core competence.
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